MUMBAI: Shares of Jaiprakash Associates posted their biggest single-day gain ever on Tuesday as the debt-ridden infrastructure company struck a deal to sell 21.2 million tonne per annum (mtpa) cement capacity to UltraTech Cement for Rs 16,189 crore, higher than the earlier consideration of Rs 15,900 crore. UltraTech Cement will pay an additional Rs 470 crore for a 4 mtpa grinding unit.

Jaiprakash Associates’ shares climbed 37.6% intraday, but pared some gains to end at Rs 11.62 on BSE, up 28% from their previous close. The deal will help Jaiprakash Associates reduce its massive debt burden of about Rs 30,000 crore. Other Jaypee group firms — Jaiprakash Power Ventures and Jaypee Infratech — surged 10% and 16%, respectively.

The deal will help UltraTech increase its market share significantly in central and south India. However, the stock ended down 1.2% at Rs 3,371.20 after hitting a lifetime high of Rs 3,600 intraday due to concerns over expensive valuations. UltraTech is trading at a trailing P/E of 42.59 times on a standalone basis, higher than its last five-year average of 31.36 times. Meanwhile, the 5% fall in July futures of JP Associates along with a 27.7% increase in price indicates that the upward movement was largely due to short covering.